Chinese Migration in Russia

18 may 2005

© "Russia in Global Affairs". № 2, April - June 2005

Vilya Gelbras, Doctor of Science (History), is a professor at Moscow State University’s Institute of Asian and African Countries, and senior research fellow at the Institute of the World Economy and International Relations, Russian Academy of Sciences. This article was originally published in Russian in the Otechestvenniye Zapiski magazine, No. 4/2004.

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Chinese Migration in Russia
The shortage of manpower will force Russia to revise its immigration policy. Russia will have to resort to international experience in this complex issue and look for creative solutions. Moscow’s future immigration policy must stimulate the Chinese to come to Russia for employment.
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Resume: The shortage of manpower will force Russia to revise its immigration policy. Russia will have to resort to international experience in this complex issue and look for creative solutions. Moscow’s future immigration policy must stimulate the Chinese to come to Russia for employment.

This article is based on two opinion polls – the largest ever conducted amongst Russia’s Chinese community – of Chinese immigrants in Russia. The first of these polls, was taken in 1998-1999 among 757 Chinese in Moscow, Khabarovsk, Vladivostok and Ussuriisk. The second poll was conducted in 2002 among 525 Chinese in Moscow, Irkutsk, Khabarovsk and Blagoveshchensk.

In both polls, those interviewed were chosen at random. The polls were taken in marketplaces and at Chinese dormitories for students and workers, and the respondents were given questionnaires in both Chinese and Russian. No intermediaries were allowed to interfere – neither foremen, nor tutors or other people engaged in the organization of the life and work of the Chinese. I and my fellow researchers determined the approximate number of respondents in each city. In 2002, it was decided that Chinese students of Russian colleges and secondary schools would comprise one-third of those polled in each of the above cities. Research conducted in 1998-2001 had showed that Chinese students are likely to fill employment positions needed by Russia as they are familiar with the Russian language, culture and customs and wish to become Russian citizens.

The data collected from the polls provides a general picture of Chinese migration to Russia that includes social and economic significance. It also shows certain distinctions between Chinese migration to Russia from that to other countries, as well as changes in the migrants’ overall composition since 1998-1999.

MIGRATION ON THE RISE

Statistics gathered by Russia’s Federal Border Guard Service reveal that about 80 percent of Chinese migrants enter Russia through checkpoints of the Far Eastern Border District; of this number, approximately 50 percent arrive from checkpoints in the Maritime Territory. In 1998-2001, the ratio of Chinese migrants entering Russia was approximately the same as the number exiting: 450,000 to 490,000 Chinese entered and exited Russia per year. In 2002, the situation drastically changed: the number of Chinese who entered the country increased by almost 55 percent compared to the annual average figure for the previous four years, while the number of Chinese who left Russia increased by 52 percent. In 1998-2001, a total of 35,900 Chinese opted to stay in Russia, while in 2002 alone this figure stood at 27,200, that is, 200 percent more than the average annual figure for the previous four years. In 2003, the situation did not change much: 23,300 Chinese migrants stayed in Russia. In all, 86,400 Chinese stayed in Russia over six years.

The number of private visits to Russia by Chinese citizens has increased dramatically as well (in contrast to business and tourists, Chinese leaving their country for permanent residence in Russia, transit passengers, as well as trips made by service personnel). Over a period of 6 years, the number of private trips to Russia has increased by almost 14 times! Interestingly, before 2002, the number of private Chinese tourists leaving Russia exceeded that of private Chinese tourists entering this country. This rare situation can be explained by the large number of Chinese tourists who had illegally remained in Russia in previous years. Furthermore, there has been an increase in the number of private firms set up by Chinese and Russians to assist travelers with visa formalities. One can only conjecture about the influence this new development may have on the total situation.

These statistics suggest several conclusions. First, the bulk of Chinese migrants enter Russia legally, that is, they have documents with official permission to cross the border. The question is: Did they obtain their documents legally? (The Russia-Kazakhstan border, which is longer than the Russian-Chinese border, illustrates the size of the problem – the Federal Border Guard Service remains unable to effectively control it.) Second, Russia has been unable to completely block channels of visa-free tourism used by Chinese citizens. Third, the scale of legal Chinese migration to Russia has increased since the beginning of 2004, yet it is not big enough to cause panic, let alone speak of a Chinese demographic expansion.

Over this period, the number of Russians entering China has far exceeded the number of Chinese arriving to Russia. But unlike the Chinese, the Russians always return home. Russian visitors to China can be divided into two groups: people hired by Chinese merchants in Russia to deliver goods from China, and people leaving for China to buy goods for commercial or private purposes. Some experts believe the first group is the larger one. At the same time, there have already appeared several small colonies of Russians in China.

China’s state strategy of a global foreign-economic offensive under the motto “Go outward” is aimed, among other things, to increase Chinese immigration to other countries. But the Chinese did not want to go to Russia in search of a better life. This situation began to change fast in recent years. During the first round of Russian-Chinese negotiations on Russia’s accession to the World Trade Organization, the Chinese delegation demanded that Russia remove barriers to Chinese merchants coming to Russia and give them equal rights with Russian entrepreneurs. Later, China withdrew this demand, and the country began to attract Russian citizens. In 2002-2003, fifty Chinese cities introduced easy procedures for issuing foreign travel passports. Furthermore, over 200 firms have been set up in the country to help the Chinese find a job abroad. This measure has contributed to the growth of migration from China.

A comparison of the results of the aforementioned opinion polls shows that the nature of Chinese migration to Russia has in many respects changed in the last five years.

First, the frequency of Chinese migrants’ trips to Russia has sharply increased. Prior to our survey of 2002, specialists believed that Russia’s Far East was largely a scene of ‘pendulum migration.’ In 1998-1999, many Chinese preferred to avoid answering the question how often they visited Russia. By 2002, the Chinese no longer evaded this question. Now, considering all the information gathered, we can definitely say that Chinese migration to Russia is not a spontaneous migration of people to a new place of residence, and not some search for a promised land. There has emerged a specific form of the movement of manpower that serves the flow of goods. Now the Chinese authorities have begun to stimulate cross-border movement of people and goods. Migrants have become a component part of China’s commercial and production structures. At first glance, their cross-border movements resemble a pendulum migration. But actually they reflect a specific mechanism of the cross-border delivery of goods, which makes it possible to minimize financial expenses (the payment of duties and taxes) or bypass official procedures restricting flows of goods.

Second, the average duration that the Chinese remain in Russia has increased. More and more Chinese migrants are permanently settling in Russia.
Third, the structure and composition of Chinese migrants have changed. The number of migrants who have lived in Russia’s Far East for more than four years has markedly decreased. This development has symbolic importance. In-depth interviews show that the Chinese who have lived in Russia for more than four to five years experience great difficulties upon returning home, and, therefore, must once again find new ways to leave for Russia.

As a result, a permanent Chinese community is gradually forming in Russia. In Russia’s Far East, this process is slow and limited in scope. According to data from 2002, in Khabarovsk, the number of Chinese migrants who have lived in Russia for over four years was half the 1999 figure; in Vladivostok, it was 20 percent less compared with 1999. At the same time, however, the number of migrants in these cities who have lived in Russia less than one year has markedly increased.
Fourth, speaking about the duration of the stay of Chinese migrants in Russia, it is possible to single out two basically different groups: some migrants act as delivery men and deliver goods to regular salesmen, or work as temporary workers at Chinese retail outlets; the other group of migrants settle in Russia, despite the lack of legality of their status.

What are the plans of Chinese migrants in the future? To what measure do they connect their future with China and with Russia? The research done in 1998-1999 showed that only 7.8 percent of those polled planned to permanently settle in Russia, while another four percent wanted to move to other countries. The 2002 poll revealed a higher percentage of Chinese migrants wishing to settle in Russia – more than 35 percent, whereas over 14 percent planned to leave for other countries via Russia. Less than half of the respondents said they would return home. This change in Chinese migrants’ sentiments was caused not so much by the living standards in Russia as by the aggravation of the social and economic situation in China.

Fifth, the analysis of Chinese migrants’ plans for the future shows that among those wishing to leave for another country, more than a half are migrants who have lived in Russia less than a year. Among migrants wishing to return to China, an absolute majority is again made of those who have lived in Russia less than a year. Apparently, the first year in Russia is a critical period, after which migrants radically change their plans for the future.

The Chinese migrants cannot break ties with their homeland because they are an organic part of China’s commercial and industrial structures. Otherwise, they would be left without a livelihood, especially since the Russian Federation passed a law in 2002 that makes it more difficult to obtain Russian citizenship. It is important for the Chinese to keep their Chinese citizenship – even after living in Russia for many years – in order to have their rights and dignity protected.

As a private person with certain plans for the future, a Chinese migrant is not inclined to subordinate his entire life exclusively to the interests of business – especially to one that he does not even own. As more and more cargo firms become involved in the ‘people’s trade’ (as border trade is officially described in China), thus driving out family businesses, the latter group must change their plans. The fact that over 30 percent of Chinese migrants hope to settle in Russia, and more than half of those polled said they were not going to return home, is of fundamental importance.

The last few years have produced another basically new phenomenon: every seventh respondent openly expressed their desire to leave for a third country. Until recently, such candidness was rather uncommon. It is difficult to say what precisely caused such a serious change in the Chinese migrants’ sentiments over just a few years: the aggravation of the social and economic situation in China (especially the growth of unemployment), or the Chinese government’s measures to implement the “Go outward” strategy and push emigration.

Sixth, Chinese social scientists have long noticed that, owing to many circumstances, above all, economic self-reliance, Chinese women have begun to demonstrate an unprecedented level of independence from men. The difference between Chinese men and women in terms of their duration in Russia, as revealed by the poll, is not large enough to suggest final conclusions. Yet, this factor deserves attention, considering the noticeably growing prevalence of men in the Chinese population.
The history of Chinese migration shows that during the first few years of migration to various countries, unmarried men made up an absolute majority of the new arrivals. Later, they were followed by women. A balance between the sexes was gradually established, and full-scale diasporas were formed. In Russia, the situation with its migrants is somewhat different. Until recently, very many Chinese came to Russia with their families. The year 2002, however, saw a sharp increase in the number of unmarried migrants.

An opinion poll, of course, is not an all-embracing census; it is difficult to say to what extent the data obtained in polls actually reflects the reality. In all of the Russian cities where the polls were conducted, a significant process was revealed: unmarried migrants have begun to prevail over those who are married, while the number of married women participating in business has decreased. These changes also testify to a decline of family business in the ‘people’s trade.’

People in the most active, employable age bracket make up an absolute majority of Chinese migrants to Russia, with more than half aged 21 to 30. In some cities, there are very many people of a more mature age. The year 2002 saw a marked increase in the number of migrants below the age of 25 (it is possible, however, that our data on this group of migrants overstates their actual percentage due to the rate of students).

Almost everywhere in Russia an increase in the number of migrants who have left their families in China occurred; this scenario could be explained by the terms of employment established by the Chinese side. Their significant increase is, no doubt, a result of changes that have taken place in the working and living conditions for an overwhelming majority of Chinese migrants in Russia. The mode of life of the majority of those polled has revealed an amazing coincidence in many aspects. For example, in Khabarovsk and Vladivostok the number of married migrants living in Russia together with their children has decreased by half. In this sense, the situation is not improving. During the previous study, almost none of the respondents said he was planning to bring his wife and children to Russia; many complained about the poor attitude of Russians toward their children and expressed fear for their own safety. All those fears were still alive in 2002. Furthermore, there were many complaints in particular about the police.

ECONOMIC IMPLICATIONS

The former representative of the Russian president in the Siberian Federal District, Leonid Drachevsky, stated there are not more than 75,000 Chinese migrants out of a population of 21 million in his region, and that the greatest danger is posed by their economic effect on the region. He is absolutely right. The main problem (at least, for the present) lies not in the number of Chinese migrants, but in the economic damage that Chinese communities inflict on Russia.

The ex-premier of the State Council of China, Zhu Rongji, estimated the volume of people’s trade in 2001 at U.S. $10 billion. The volume of official trade in the same year amounted to U.S. $10.7 billion. The positive balance in the official trade stands at 3 to 5 billion dollars in Russia’s favor. However, the volume of the people’s trade is determined by China’s net income brought by the sale in Russia of Chinese goods – purchased from producers with money earned by selling them in our country. So, actually, the favorable balance in trade belongs to China.

At the 2nd Russian-Chinese Banking Forum (2003), a Chinese participant described the most common pattern of Chinese firms’ activities in Russia. A company registers itself simultaneously in two countries. One of its subsidiaries is registered in Russia by a Russian citizen who has no financial signature authority as such; this subsidiary engages in wholesale and retail trade. The other company is registered in China by a Chinese citizen and it engages in wholesale operations. Goods are supplied in small shipments from a storehouse in China to Russia. The revenues from the sales are sent back to China. This form of trade accounts for 40-60 percent of Chinese exports to Russia.

The 2002 poll has shed some light on how the trade operations of Chinese migrants are financed. In Russia, there have emerged underground Chinese banks which finance various kinds of illegal operations, and intermediary firms which transfer money to China. Formally, some of these are exchange offices, but in reality they transfer money via banks of third countries, serve Visa, Master-Card and other bank cards, give financial advice, as well as engage in other operations.
Interestingly, neither China’s Elos Bank, which is officially registered in Russia as a branch of the Bank of China and has a very small authorized capital, nor the numerous illegal financial firms, engage in credit operations. Meanwhile, money transfers to Beijing’s Yabaolu – a well-known center of wholesale trading companies and cargo firms serving Russian ‘shuttle traders’ and China’s ‘people’s trade’ in Russia – can be made even in cash!

The general pattern of illegal banks’ actions is as follows: they accumulate revenues of trade companies, allocated for turnover development, and via intermediary firms (mostly Russian ones) store up, purchase and send to China scarce goods (timber, nonferrous metals, pine nuts, and many others). In China, these goods are sold, and the revenues are divided in respective shares among all those who participated in the transaction at different stages. In other words, there is a smoothly operating mechanism of “black” schemes for looting Russia. Chinese firms closely cooperate with Russia’s shady organizations. For example, about 1.5 million cubic meters of wood is cut down illegally in the Maritime Territory every year. Russia is not the only country to suffer. According to a February 27, 2002 report of the Reuters news agency, the World Wildlife Fund expressed its concern over the future of Russian forests in the Far East. The Fund said these forests may disappear in five years because of the illegal deforestation.

The aforesaid confirms the conclusion that Chinese migration is a link in China’s trade and industrial system, oriented in recent years toward the ‘cross-border economy.’ Russia is already included in China’s division of labor through the business activities of Chinese migrants. China has already assigned a place for Russia in this process – a supplier of resources and a market for products found unfit for sale on other markets.

The participants in the polls expressed interesting considerations about their business plans in Russia. Most of them said their plans depended on the market situation and the success of their business. As in 1998-1999, Chinese migrants prefer to extend their business operations in Russia rather than China. In the late 1990s, 28.5 percent of those polled wanted to start or extend their business in China, whereas 35.3 percent gave preference to doing business in Russia. Interestingly, even in 1998-1999, that is, right after the financial default in Russia, amidst uncertainty and social deprivation, only about 10 percent of Chinese businesspeople planned to reduce their business in Russia, while a mere six percent intended to shut down their operations. In 2002, the latter figure decreased to one percent. In 1998-1999, 13.3 percent of those polled planned to remain as hired workers, compared to about 10 percent in 2002.

Thus, if the market situation permits, a majority of the respondents plan to extend their business operations in Russia. These sentiments will determine the state of Chinese migration into Russia, and most importantly in the Far East. Much will depend on the immigration policy of the Russian authorities, which are now inclined to continue with its prohibitive nature.

However, the shortage of manpower will force Russia to revise its immigration policy. Russia will have to resort to international experience in this complex issue and look for creative solutions. Moscow’s future immigration policy must stimulate the Chinese to come to Russia for employment.

Yet, this is not enough: Russia needs an immigration policy that would take into account the specific features of its different regions. The difference between Russia’s European part, Siberia and its Far East is immense. For example, many Russians in the Far East now have to engage in an individual cross-border 'shuttle trade’ – not because of Chinese immigration but because of the poor state of the regional economy, which, in turn, was caused not by a manpower shortage but by the lack of clearly formulated goals for developing local industries.

The widespread belief that immigrants are taking jobs from native workers does not correspond to reality, as follows, for example, from reports coming from the Maritime Territory, a region where migration flows are particularly high. An analysis of the situation there shows that areas where economic growth has begun require additional manpower, and immigrants filling job vacancies only contribute to the economic revival and thus to increased employment among the local population.
The aforesaid suggests the main conclusion: a strategy for developing Eastern Siberia and the Far East must be aimed at increasing the competitive ability of Russian industries in order to counter the growing inflow of goods from China.

Chinese communities in Russia have been actively extending the sphere of their business. Their activity inflicts damage on Russia’s economic security and checks the development of a civilized market economy. Also, it strengthens Russia’s position as a raw-material appendage of China. This turns Russia, primarily, into a market for Chinese goods, thus preventing economic growth, especially in the Far East, and contributes to increasing Chinese migration to Russia and, via Russia, to other countries.

POSSIBLE STRATEGIES

The manpower shortage threatening the Russian economy, together with the continuing social crisis, has caused some Russian experts to advocate the broad use of Chinese workers, which would call for introducing a liberal immigration regime in Russia. On the other hand, many others warn against en masse Chinese immigration to Russia.

Over the last decade, the Russian authorities have been seeking to build an effective administrative mechanism to control migration; these efforts have still not proven successful. An analysis of the situation suggests several considerations about a future state migration policy.

1. Russia has never had a consistent demographic policy. Now the country is reaping the fruits of its past policy when the citizen was not the central focus of society and the state. The entire organization of Russian life – transportation, shops, housing, public health, etc. – is not intended either for the population’s expanded reproduction, or even for the maintenance of health. Russia must adopt a sensible demographic policy, as well as a comprehensive demographic and socio-economic strategy.

2. The Russian authorities must work out a comprehensive, long-term strategy for developing Eastern Siberia and the Far East, which would be basically different from all the previous programs. To this end, Russia must:
– take into account possible changes in the political, social and economic situation in China. In that country there are acute conflicts in all areas of domestic life. Under The 21st Century Challenges to China program, an opinion poll was conducted among China’s 100 major scholars. In their opinion, the following six social issues will be “extremely important” until the year 2010: unemployment (66 percent of those polled); relations between different sections of the population (64 percent); corruption (62 percent); ecology and resources (56 percent); overpopulation (54 percent); and “stagnation in the reform of the socio-political system” (52 percent).

Let’s examine in more detail the first problem since this is directly related to migration. At the end of 2002, China’s population exceeded 1,284 million people. Out of this total, almost 933 million Chinese live in rural areas; of them, 150 to 200 million are considered to be redundant manpower. About 90 million of these individuals manage to find work in the cities, but another 60 to 110 million fail to find employment. This poverty-stricken mass of people is steadily increasing. In the 1980s, a one-percent growth in the GDP was accompanied by the creation of 2.4 million jobs; in the 1990s this figure decreased to 700,000-1.1 million. This number represents an inflammable source of social discontent, as well as a giant migration potential in China. Russia is interested that China’s development is safe for the neighboring countries; should open conflicts arise there, Russia may find itself in distress.

Beijing plans to quadruple its GDP by 2020. According to Chinese expert estimates, China will have exhausted a large part of its natural resources by 2010. By 2020, it may even have difficulty meeting its demand for coal. China needs natural resources from the entire planet, including those of Russia;

– make plans for developing Eastern Siberia and the Far East, bearing in mind that it is unable to compete with China. According to figures of the United Nations, average per capita production costs in China are 48 times less than in the U.S., 30 times less than in Japan, 20 times less than in Taiwan, and 14 times less than in South Korea; they are also lower than in Mexico, Turkey, the Philippines, India and Indonesia. Therefore, companies from various countries have in the last few years moved the production of many goods to China. Thus, Russia will have to completely change the mentality of its business community, which has been trying to persuade China to buy Russian goods for many years now. Russian businesspeople should learn from international experience and understand that China will buy only those goods which it badly needs – and only for a limited period of time. Several industries in Eastern Siberia and the Far East manufacture products that cannot stand up to competition with Chinese goods. It is inevitable that these production facilities will be closed. Russia would only gain if it uses Chinese industries for legal supplies of required products to its market, and if the “shuttle (people’s) trade” is gradually curtailed;

– exempt investors from taxes (completely or partially) for financing the economy of Eastern Siberia and the Far East. It would be expedient to study the experience of postwar West Germany in liquidating a housing crisis, as well as the U.S. experience in exploiting the natural resources of Alaska;

– try to understand what Russia’s real, rather than illusory, comparative advantages are and on this basis build economic, social and immigration policies.

3. Moscow must admit that Chinese migration will not solve the manpower shortage problem in the country. First of all, the Chinese leadership will not allow that, since it is using migration for implementing its global foreign-economic strategy. The manpower shortage problem can be solved through a wide use of tenders and orders that would provide for the temporary use of Chinese manpower in Russia.

It would also be expedient to follow in the footsteps of some European countries and attract Chinese specialists and highly skilled workers to Russia on a selective basis. The Chinese government is already conducting such a policy toward Russian specialists. Therefore, Russia should differentiate its visa practices, borrowing from international experience.

Simultaneously, Russia must work out a program for developing its industries on the basis of new and high technologies and venture capital. Maximum economy of resources and manpower must be the main development priority.

There are manpower resources in Eastern Siberia and the Far East. However, people cannot find a worthy use for their talents, while many must help accommodate the flow of Chinese goods. The Russian authorities, therefore, must create prospects of permanent employment which will lead to a worthy existence for the local population and halt its moral degradation and lumpenization.

4. Of increasing importance are efforts to combat xenophobia and various kinds of nationalistic movements.

5. There is a possibility that students will make up the bulk of Chinese migrants to Russia. The high cost and low quality of a Chinese education prompt many Chinese to send their children abroad for schooling. The number of Chinese students in other countries has been steadily increasing each year. In 2003, however, only one in every 12 Chinese who left to study abroad chose Russia.

Russia could attract more young Chinese to its educational institutions by launching a large-scale publicity campaign in China. The success of such a program would help Russia solve, at least, two major problems: first, it would increase revenues of Russia’s educational institutions and help them to carry out a modernization program; second, initiate a program to train Chinese students of secondary and higher educational establishments with a good knowledge of the Russian language, as well as specialists who could work in Russia. All those wishing to stay in Russia must be given the corresponding rights, including the possibility of receiving Russian citizenship. This goal requires serious changes in Russian legislation, as well as in Russia’s Foreign Ministry’s operation.

To evaluate the possible efficiency of the above measures, an opinion poll was conducted among Chinese students in Moscow, Irkutsk, Khabarovsk and Vladivostok. The poll shows that these measures deserve attention and state support, yet their implementation requires painstaking preliminary work. Presently, there are unemployed Chinese graduates in Moscow from Russia’s higher educational establishments. They have been living in Russia for up to five years and show a desire to live and work here. They are looking for jobs in Chinese communities because they have failed to find work in Russian organizations. The time has come to make political decisions to drastically change this state of affairs, and to translate these decisions into reality.

Last updated 18 may 2005, 16:47

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